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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2020

Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:


Level 1:						Observable inputs such as quoted prices in active markets.
Level 2:						Directly or indirectly observable inputs, other than quoted prices in active markets.
Level 3:						Unobservable inputs in which there is little or no market information, which require a reporting entity to develop its own assumptions.

Fair value valuation techniques

Assets and liabilities measured at fair value are based on one or more of the following valuation techniques:


Market approach:						Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
Cost approach:						Amount required to replace the service capacity of an asset (replacement cost).
Income approach:						Techniques used to convert future amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models).

The estimated fair values of the Purchase Options were based on unobservable inputs for which there is little or no market information available and required us to develop our own assumptions as follows (dollar amounts in thousands):


	Real Estate Loan 1				Real Estate Loan 2				Real Estate Loan 3				Real Estate Loan 4
Exercise price	$	15,143			$	17,377			$	5,503			$	37,800

Term	2.59			(1) (2)	2.68			(1) (2)	2.67			(1) (2)	1.42			(3)
Expected volatility	65.0		%		55.0		%		55.0		%		55.0		%
Risk-free rate	0.3		%		0.3		%		0.3		%		0.2		%
Expected annualized equity dividend yield	6.5		%		7.5		%		17.1		%		—		%

(1)The purchase option is currently exercisable.

(2)The option term is the period from April 1, 2020 through the fully extended maturity dates of the respective mezzanine loans.

(3)The option term is the period from April 1, 2020 through the date in which the development project is completed and the option becomes exercisable.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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